Meanwhile, modest demand is being offset by lower output as a result of the scheduled maintenance outages that most European steelmakers undergo in July-August. The most recent announcement on Algerian import licences is likely to provide further support for rebar demand.

However, the company’s Polish subsidiary is not increasing its extras, a source said.

Compatriot Spanish steelmaker Megasa has not followed Celsa’s move yet but may consider doing so, a source at the company said. “Let’s see how the market moves and we will decide [later]. So far, we are raising the base price rather than changing the extras,” the source said.

Meanwhile, Italian long steel manufacturers are “not [increasing extras] at the moment”, according to a producer source in the Southern European country.

Rebar prices have been going up through July, with Metal Bulletin’s weekly price assessment for domestic rebar in Southern Europe at €430-445 ($505-523) per tonne delivered on July 26. This was up by €30-35 ($35-41) per tonne from €400-410 ($470-482) a month earlier.

The current assessment consisted of a base price of €150-165 ($176-194) per tonne ex-works, around €15 ($18) per tonne for delivery costs and an average €265 ($311) per tonne extra.

Rebar prices were widely expected to continue to go up in August amid an uptrend in the international scrap market, and lower availability of finished steel because of scheduled maintenance outages at the EU’s mills during the summer holiday period.

Demand has remained subdued during July, especially on the export side, and is likely to remain limited despite import licences finally being distributed in Algeria.

Metal Bulletin’s weekly price assessment for Southern European rebar exports was €435-450 ($511-529) per tonne fob main ports on July 26, up by €50-55 ($59-65) per tonne compared with €380-400 ($447-470) per tonne fob in late June.

As much as Algeria’s announcement on licences was long-awaited by most Southern European sellers, optimism was not shown by all market participants.

“This move will not have a major effect on the prices from European producers, [because] not too much [of the volumes] will come from new production,” one source said, adding that a lot of material has been already produced for Algerian clients under contracts signed earlier at lower prices. “First, these quantities will now be shipped to Algeria.”

Meanwhile, the rise in scrap prices will support rebar prices, the source said.

“Do not under-estimate [the value of] 500,000 metric tonnes, please,” another source said. “It is nearly the total annual production of one normal mini-mill.”